Why In-House Law Departments are Getting Bigger

Name: Robert C WeberAge: 61Designation: Senior Vice President, Legal and Regulatory Affairs, and General Counsel, IBMEducation: Graduate from Yale College in 1972 and Duke Law School in 1976; is also a Fellow of the American College of Trial Lawyers and the International Academy of Trial Lawyers

You have a 500-member team. Why does IBM need a big in-house law department? It is now accepted that the General Counsel has a full seat at the senior table on matters of legal and non-legal participation. In-house lawyers are full players in a company’s strategy, and also trusted advisors to the CEO, Board, and Chairman. There’s clearly been an evolution of law departments in large companies.

Why has IBM set up legal resource centres for which it is even hiring fresh law graduates? This is not a play for providing legal services to others. It’s a good business model as we have a constant demand for due diligence in mergers and acquisitions. By having these centres we can run a virtual deal room 24X7. We train young people because other than litigating in the court, we do everything else ourselves.Another company, HP, has been hiring law students on campus, bypassing elite law firms. Will large technology companies follow this?There’s some economics to it: Since the downturn, it’s been easier to convince law students that we are a good career option. By training young talent in-house, companies get more productive people at a better cost. I think more companies will follow suit. There’s been some reluctance in firms to hire from law school because they wanted them trained law firms; but the way big law firms have developed, they don’t get any training. Litigators in law firms may have worked for years but may not have seen a court room or taken a witness statement ever. Have law firms gone the big investment bank way?There’s no doubt about that. The big-law-firm business model is a questionable one; their notion of ‘the bigger the better’ is wrong as they become partner-profit-centric, losing sight of clients. Some of that comes out of investment bank envy. By this, law firms have not only alienated many clients but created a whole set of sub industries. In IBM, I know I don’t have to buy the bundled services on offer, For instance, if I want documents reviewed, I don’t use law firms, but special service providers at 20 percent the cost.

How is the changing business environment affecting your work? Change is happening at a much increased velocity. Take, for instance, corporate governance. There’s been more change in the past 18 months than there was in the last 10 years. It’s about the new social contract between the companies, employees, and shareholders. It’s under attack but not everything is negative. The society is demanding more engagement and transparency. If you take intellectual property, it’s not just about getting patents but protecting the knowhow and securing the agreements around it.

IBM expects Watson [supercomputer] to disrupt many businesses. It’s piloting in financial services and healthcare. How does that impact the legal world?We’ll need a lot ‘lawyering’ around Watson to protecting its IP and fit it into the various regulatory schemes. I think Watson has the expertise to be transformative across a number of domains. I can see the analogy of Watson in law with Watson in medicine. Both are based on an extraordinary body of objective literature but both have an element of human judgement. But Watson is not there yet. It will probably get there in your lifetime, not mine.

This article appeared in the Forbes India magazine issue of 21 December, 2012